A report released today, entitled ‘Who Pays For Our Common Wealth?’ indicates that almost a third of Australia’s largest companies are paying less than 10c in the dollar in corporate tax.
The report, the first of its kind according to the Sydney Morning Herald, investigated tax payments of the top 200 companies on the ASX.
It reveals that up to $80 billion dollars in tax revenue went unpaid by these companies between 2004 and 2013.
A sum of money that could all but wipe out the past two budget deficits, without needing to reduce welfare spending and cut payments to those most in need.
To put things in perspective, an average person earning between $18 000 and $37 000 in Australia pays 19c of each dollar in tax, while those in the $37 000 to $80 000 category pay 32.5c in the dollar, jumping to 37c for each dollar over $80 000.
Earning between $18 000 and $37 000 could easily place you below the poverty line in a country where average rent for a one-bedroom apartment outside inner city areas is $1200 month.
Yet, these individuals pay almost one fifth of their income in tax, whilst many of the top 200 companies in the country pay only half this amount on average.
The report findings are not inherently surprising, for it is well known that overly generous tax concessions are the domain of the rich and well connected, who can use offshore tax havens and creative financial management to their advantage.
What is surprising is the lack of highly-charged emotional responses that have been roused from the general population.
This is the kind of news that just passes by under the radar, seen as boring financial news, hardly worth an average person’s time or interest.
If front-page news were instead to expose asylum seekers or social security dependents dodging their financial responsibilities, undoubtedly it wouldn’t float by unnoticed.
Emotionally charged labels like ‘dole bludgers’ or ‘illegal arrivals’ easily excite an ill-informed population whereas corporate tax avoidance puts most to sleep.
Earlier this year the government cited uncontrollable and unsustainable welfare spending as the reason for its ’emergency debt crisis” and set about cutting expenditure and making services harder to access for the poorest and most vulnerable in society; the unemployed, the aged and the youth.
We saw new reductions and restrictions in senior’s concessions, an introduction of a GP levy for health care cardholders, a stringent tightening of eligibility for youth allowance along with almost half a billion deducted from indigenous programs.
Yet corporate tax rates were reduced rather than increased and no mention was made of the deficit being in any way a revenue problem.
The report argues that this is exactly what we have.
“Tackling corporate tax avoidance is an urgent priority; Australia does not have a spending problem, it has a revenue problem and it must be fixed,” write the authors of the report for the SMH.
It seems that Australia’s most pressing problem is not addressing the “debt crisis”.
It is uncovering an ideological agenda that demonises the most vulnerable in society and protects powerful companies who shirk their most basic financial responsibilities.
We should be concerned about the findings of “Who Pays For Our Common Wealth?” as the cultural and social costs of ignoring corporate tax avoidance will inevitably by borne by those unable to carry the burden.
You can download the full or abridged version of the report here.